House Panel Debates Medicaid Expansion Proposal

Despite Gov. Rick Perry remaining strongly opposed to expanding Medicaid, a House panel on Tuesday considered legislation that would expand coverage to poor adults under the Affordable Care Act.

“This is not Medicaid expansion; this is Texas Plus or Medicaid Plus One,” said state Rep. Sylvester Turner, D-Houston, who laid out his House Bill 3376 at the House Appropriations Subcommittee on budget transparency and reform.

HB 3376 would expand Medicaid coverage to individuals below 133 percent of the federal poverty line. The bill includes a severance clause that requires the state to stop financing the program if the federal government reduces its share of financing below 90 percent and — “in the spirit of conservatism,” as Turner put it — also includes cost-sharing requirements such as co-payments.

"I don't think anyone can dispute the numbers. We may dispute whether or not we want to do it," said Turner, emphasizing that the state comptroller estimates expanding Medicaid coverage as proposed in HB 3376 would save the state $50.4 million in the 2014-15 biennium. “From a fiscal, financial, budgetary point of view, the numbers are overwhelming.”

Health care providers, advocates and religious leaders overflowed the committee room to testify in favor of the state expanding Medicaid coverage. Anne Dunkelberg, associate director and health policy analyst with the left-leaning Center for Public Policy Priorities, testified that health care premiums can consume 40 percent of a low wage earner’s income, prohibiting the working poor from purchasing coverage.

But not all lawmakers seemed swayed by the testimony.

“We always paint a picture of people crying in bed at night because they don’t have health insurance, and I really don’t think that’s true,” said Rep. Myra Crownover, R-Denton, the chairwoman of the subcommittee. She gave the example of healthy, uninsured adults she knows who do not think they need health insurance. “Everybody really wants car insurance when they have a car wreck, [but] they’d like to drive around uninsured if they could get away with it,” she said.

A report by Billy Hamilton, the state’s former budget estimator and former deputy comptroller, estimates the state could achieve even greater savings by expanding Medicaid — $1.2 billion in the 2014-15 biennium, as Texas would spend less on other health programs to cover poor populations. Hamilton also estimates the Medicaid expansion would cost Texas $15 billion over 10 years, while allowing Texas to draw down $100 billion in federal financing. Another report by the Hobby Center estimates as many as 4.4 million of the 5.8 million Texans without insurance in 2010 could have insurance by 2014, depending on how federal health care reforms are implemented.

But Perry and other opponents of expansion say that Medicaid is broken and that expanding Medicaid under the Affordable Care Act would compound the exponentially rising costs of Medicaid.

These Texas Tribune interactives show the economic impact of the Medicaid expansion by legislative district, and the effects on uncompensated care and the rate of uninsured by county. Texas Impact and the Methodist Healthcare Ministries of South Texas commissioned the reports.

Kevin Moriarty, president and chief executive of Methodist Healthcare, told the committee that Hamilton’s reports provide compelling arguments to expand Medicaid coverage from a humanitarian, financial and budgetary perspective.

“Taxpayers get our dollars back. It seems to me fairly ludicrous to allow these funds to go to other states,” Moriarty said. “Taxpayers locally pay more because we don’t do this.”

Moriarty also emphasized multiple studies that show 5,000 to 9,000 people die each year because they lack access to health insurance.

John Davidson, health care policy analyst for the conservative Texas Public Policy Foundation, testified that the state should not expand Medicaid, but rather, seek a private market solution to expanding health coverage.

“We believe its reckless and unconscionable to expand a program that’s so obviously flawed,” said Davidson, emphasizing that low reimbursement rates and bureaucratic red tape have created a fragile network of Medicaid providers, and that multiple studies show Medicaid recipients have had worse health outcomes than those with private health plans.

If Texas does not expand Medicaid, Davidson said, a third to half of the potentially eligible population could qualify for a subsidy to purchase a private plan through the health insurance exchange.

The committee temporarily recessed so that House members could meet in the chamber. When they return later Tuesday afternoon, they are expected to consider House Bill 3791, authored by Rep. John Zerwas, R-Simonton, which would require the state’s health commissioner to craft a “Texas solution” to Medicaid by pursuing a Medicaid waiver or authorization from the federal government to reform Medicaid while expanding coverage to poor adults.

During budget negotiations, the Senate approved a rider by Sen. Tommy Williams, R-The Woodlands, which would also encourage the state to prioritize premium assistance for private market plans and contain state spending on the program. The House approved a similar measure during its budget negotiations, then backpedaled on that decision and removed the amendment on a party-line vote.